Power Shortage Not California's Only Energy Problem
By Joseph Giordono, Staff Writer
But it's not just Californians who will feel the pinch.
With supply tight, demand increasing and prices soaring, natural gas bills nationwide for this December could be twice as high as last year's winter bills.
Average consumers will see a 60 percent spike in their bill regardless of whether they reduced energy use, according to officials from the Southern California Gas Co., also known as The Gas Company. Some have seen the increases already.
"Someone should crucify those guys over at The Gas Company. My usage went down, the gas people tell me I am running at maximum efficiency, and still my bill goes up," said Rob Nowaid, owner of Flooky's hot dog shop in Woodland Hills.
Nowaid's natural gas bill for his eatery -- which he opened in 1980 -- was $277 for the month of December, 35 percent higher than his bill last December.
"I'm a small business, and there is no way that I can pass this cost off to my customers. If they came in one day and found their hot dog cost 35 percent more than yesterday, they would laugh in my face," he said.
According to gas company officials, the rising bills reflect increases in their cost to purchase natural gas. But they also said the rate hikes are not a precursor to spiraling into a disaster similar to that engulfing the electric utilities.
"We certainly are concerned about the impact on our customers and we want to help anyone who needs special payment options or who wants to improve their energy efficiency," said Denise King, a spokeswoman with The Gas Company.
"This is not just a matter of gas prices being raised in the winter, when traditionally usage is at its peak. Our peak day this year actually came in the summer, when we were supplying a lot of gas to utilities that needed energy for people's air conditioners."
King said the company imports gas from 25 suppliers throughout the U.S. Southwest and is in no danger of being cut off. She said customers in Southern California are getting off easier than gas customers in other regions.
The Gas Company now charges 65.2 cents per therm for its gas, compared with a national average of $1.05. But last January, the gas company was charging 25 cents per therm.
Last Friday, then-Secretary of Energy Bill Richardson ordered natural gas producers to continue sending gas to California so electricity producers can have fuel to burn to create electric power.
"It really just goes back to supply and demand. Customers across the United States are going to feel the impact," King said.
Industry experts said the use of natural gas in homes thoughout the nation has been on the upswing for several years while the supply has stayed relatively constant.
"Since about the 1970s, the use of natural gas has been on a comeback," said Daphne Magnuson of the American Gas Association, an industry group. "In the home heating sector, gas now captures 70 percent of that market of new houses."
And almost a quarter of all electric generation plants in the United States are fueled by natural gas.
Farmers in North Carolina, and residential consumers in Massachusetts, Mississippi and Washington state all face the same crunch.
Things have become so bad in Georgia that the state Public Services Commission recently adopted rules allowing residential customers freedom to switch natural gas providers even if they owe money and are in danger of having service cut off.
Officials in the University of Texas system have notified the legislature that utility costs this year will be at least $42 million over budget projections.
In Los Angeles, where 15 percent of the Department of Water and Power's electricity is generated at natural gas facilities, the spike in gas prices has caused officials to back down from a promised rate decrease.
But as consumers feel the pinch, natural gas prices for some are so high that, ironically, it may be more economical in California to use electric-powered appliances than gas-powered in spite of the ongoing electricity crunch.
According to estimates by the California Energy Commission, running a 1.5 kilowatt space heater for five hours a day would cost around $30 for a month. A gas furnace running for the same amount of time would cost approximately $80 per month.
But according to gas company officials, reducing gas bills can be accomplished by a few simple conservation measures.
For every degree lowered between 70 and 60 on a gas thermostat, they said, consumers can cut as much as 5 percent of their heating costs.
That might not be enough to blunt the impact of higher bills.
"Even if consumers are using less energy than before and being more energy efficient, their bills are likely to be higher than before," said King of Southern California Gas. "There is really no way around it until (natural gas) prices go down."